The payback period and accounting rate of return (ARR)methods are suitable to investments with a short time span.

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The payback period and accounting rate of return (ARR) methods are both commonly used for investments with a short time horizon, typically less than 3-5 years. For longer-term investments, more sophisticated methods such as net present value (NPV) and internal rate of return (IRR) are often preferred.

The Payback Period and Accounting Rate of Return (ARR)methods Are